You try to have the Bitcoin conversation. All you hear back is fear, uncertainty or doubt (FUD). You try to explain Bitcoin and their eyes glaze over. Often no-coiners or alt-coiners just don’t want to hear about Bitcoin.
Cognitive Biases At Play
Let’s try to understand by looking into the cognitive biases that enable the FUD and noise . Once these are understood, we can try de-biasing instead.
We define cognitive bias[1] as, “a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own “subjective reality” from their perception of the input. An individual’s construction of reality, not the objective input, may dictate their behavior in the world.”
In short, our judgement is often not accurate in predictable ways.
To understand the systematic errors in people’s Bitcoin judgements, let’s start by looking at four biases around bitcoin’s price.
Availability And Recency Bias
“Bitcoin is too volatile!” When Bitcoin’s price changes by more than a fraction, every news source has an article, often with a language of hysterics. You cannot hide from the availability of that information.
This is availability bias[2], “the human tendency to think that examples of things that come readily to mind are more representative (of truth) than is actually the case.”
Articles about Bitcoin’s volatility are also in recent memory. This is recency bias[3], “a cognitive bias that favors recent events over historic ones.” One way to reduce the availability bias is to look at more data. One way to reduce the recency bias is to look at more data over time. If you zoom out and take a long view of more bitcoin price data, the price
